Take charge of your finances with a spending diary

Submitted by Betsy Muse on Sat, 03/23/2013 – 07:01

Keeping a spending diary is one of those obvious tactics that you’ve probably heard or read about somewhere. Now it is time to do it. Even those of us who have little to no debt need to periodically monitor our spending to get back on track. It is amazing how much money most Americans waste. I didn’t realize just how much money was seeping out of my monthly budget until I kept a money diary. This was in the early days when I was working to pay off all of our unsecured debt. The first week or so I kept the diary I spent less because I knew it had to be written down. Then old habits kicked in and by the end of the month I figured out we had spent about $350 on nothing. Too much was being spent for lunches and I wasn’t planning ahead for snacks when I was out with our small children. These were the days before the internet made buying so easy or we probably would have wasted even more.

The second month we did even worse. Perhaps I was rebelling at the thought of having to write everything down. I made an effort in the third month to be more careful with spending and by the fourth month I had our spending much more under control.

Here are the rules for keeping a spending diary:

  • Write down everything you spend. Pay a bill? Write it down. Pay a road toll? Write it down. Put a quarter in a bubble gum machine? Write it down.
  • Be honest. This will not work if you are too embarrassed to write down your purchases.
  • Keep a memo on your phone and keep a pad of paper in your wallet or purse. Make it convenient to write down what you spend.
  • Don’t beat yourself up over wasteful spending. Just ask yourself if you really need something before you buy.
  • Share your successes – both small and grand – with a family member or friend who may be going through the same process. If nothing else, keep us updated here. We’d love to hear from you and celebrate along with you.
  • Keep the diary for at least a year. We kept ours until we had our debts paid off.
  • Include your children in this process. It is never too early to teach children how to save money – or how not to waste it.

I’ve been debt free for almost 14 years. It didn’t happen by accident. I worked hard to get spending under control. It may not be for everyone, but I found a spending diary was a very valuable tool.